Don’t Forget To Bring This To Your Next Labor Board Conference

When California employees initiate complaints for unpaid wages (including misclassification or for unpaid overtime), the typical procedure is for the Labor Commissioner to schedule a conference, under California Labor Code Section 98.3, to include a Deputy Commissioner, the employer and the aggrieved employee.

A pamphlet issued by the Labor Commissioner says this about these conferences:

“The conference will be conducted informally and the parties will not be under oath.  The purpose of the conference is to determine if the claim can be resolved without a hearing.  Plaintiffs are not required to prove their case at the conference.  The parties should be prepared to talk with the deputy about the claim, including whether there are any witnesses.  However, the parties do not need to bring witnesses to the conference.  Plaintiffs should bring a copy (not the original) of any document that supports the claim, but should not bring documents that have already been submitted with the claim form.  Defendants should also bring any documents that support their position.”

The vast majority of wage claims resolve at this conference. And this should be a goal, since it’s essentially a “free” settlement conference, though the Deputy Labor Commissioners are not usually unbiased, which is why I strongly recommend that employers have attorneys accompany them to the conference.

If the claim does resolve during the conference, the Deputy Labor Commissioner has a form “settlement agreement” that they will fill out which purports to document the settlement. The parties will sign the agreement.

Unfortunately, this agreement is about as narrow as possible, meaning that, in exchange for the employer agreeing to pay a sum, the agreement provides only that the employee releases and waives her rights to further pursue the wage claim, but nothing else. If the employee subsequently decides to pursue a retaliation, discrimination or harassment claim, the agreement will have no impact.

I believe it is a prudent practice, when attending these conferences, to come prepared with a broader settlement agreement that, in exchange for the same sum of money, requires the employee to effectively release all claims she could have up until that point. A poorer alternative, I’ve found, is to make the settlement subject to the employee signing an agreement to be subsequently prepared and provided by the employer’s counsel. This is a poorer alternative because, after the employee leaves the conference, she may decide she wants to pursue additional claims, but will not be bound by any agreement.

What should a full blown settlement agreement include? Lawyers may disagree on this, but my practice is to spell out all potential statutes (i.e., Title VII, FEHA, Railroad Act, etc.). A California Civil Code Section 1542 waiver is routine. My agreement typically also includes both a nondisparagement and confidentiality clause (concerning the terms of the settlement). If the employee is no longer working for my client, I will also include a clause precluding her from applying for future employment, which effectively eliminates any claim that she was subject to retaliation or discrimination if not re-hired. Finally, my agreements always include choice of law, integration and merger clauses.

An employee, either alone or represented by counsel, might refuse to sign such a broad settlement agreement, and insist instead on the narrow agreement provided by the Labor Commissioner. You and your client will need to decide whether this is satisfactory. Perhaps it is. Perhaps it isn’t. Either way, you’ve come prepared.

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Appreciating Why Our Clients Appreciate Transparency

“I think in this age, optimism like that … it’s a revolutionary act.” — Jerry Maguire

Transparency in the practice of law was not included in my law school curriculum. Was it in yours?

In fact, it wasn’t until I launched a solo practice, 20 years in, that I began to appreciate, as I never did as an associate or Biglaw partner, the value clients place on transparency. No longer representing large, well-heeled or well-insured companies, in which my contact sits in his air-conditioned cubicle at the Home Office in Indiana or wherever, comfortably removed from the collateral damage and financial pain of a lawsuit, these days I deal daily with local mom-and-pop employers for whom the costs of litigation alone could spell financial ruin. These clients not only desire transparency — they feed on it.

What do I mean by transparency? Since I’ve already alluded to litigation costs, let’s start there. My clients from the days of yore nearly always demanded extensive and detailed budgets, often keyed either to the American Bar Association Uniform Task-Based Management System Litigation Code or something more proprietary. These days, my clients — small manufacturers, restaurants, retail and property management concerns — are typically unaware it’s even appropriate to ask for a budget.

Well, it is. And they should.

My argument here is not purely altruistic. If anything was hammered into my head during my two-decade apprenticeship for solo law practice, it was this: I’ve got to get paid! Businesses unfamiliar with the messy business of litigation, who aren’t burning off insurance, are invariably in for a rude awakening when they receive their first bill. If small business owners get heartburn when they receive their lawyer’s bill for negotiating a lease (they do), the bodily response to a litigator’s bill can be more like a heart attack.

This is not to suggest we haven’t legitimately earned our fees, or even that the business owner begrudges paying us — the topic for a different discussion. Rather, it may be they just can’t, and neither of us knew that until he opened my bill.

Sometimes the problem is definitional. Each of us has our own idea of what “expensive” means. Take, for example, an out-of-state deposition. When I tell a client, “we could do that, but it’s likely to be ‘expensive,'” I could be thinking, but leaving unsaid, that $8,000 means “expensive” (my last out-of-state deposition, to Nome, Alaska — literally!). Having no frame of reference for the cost of a lawyer traveling to Alaska and taking an important deposition, my client might be thinking a third or half of this amount is still really “expensive.” When he opens my bill, it’s time to call 911. Fire up the hearse!

Speaking from my own experience, I find my biggest reluctance in being transparent about the anticipated costs of doing something beforehand (it’s all too transparent on the invoice afterwards), results from a fear that the client won’t agree to something I think is necessary. This fear is legitimate. I want to win and some steps are necessary to win (like a deposition in Nome, where the plaintiff lives).

On the other hand, unless I’m prepared to do the work pro bono for my client’s estate (remember it was my invoice that killed him), I’m simply deceiving myself. If anything, the solution to this dilemma is greater, not less, transparency. By this I mean spelling out in writing the recommended action, the reasonably anticipated cost, and the expected consequences if the action is not undertaken. If the client can’t or won’t pay for it, that’s a discussion to have before my plane touches down in Nome.

Strategy is another area where clients appreciate transparency. Hearken again back to my days representing Fortune 500 companies. While my client may have been emotionally removed from the pain and cost of the lawsuit, he or she was usually intellectually involved in the development of our strategy. Detailed reports, including both a discussion of the strategy and the likelihood of success, were de rigueur.

My small business clients are all over the map on the topic of strategy. Some demand to know every detail and want to collaborate, while others just want to sit in the back seat, blissfully unaware whether what I’m doing — and what they’re paying dearly for — is reasonably calculated to actually work. I understand this thinking, and it actually makes my job easier, but I don’t generally countenance it. Why? Because the only surprise worse for my client than opening that bill for the Nome deposition is learning, as we file into the courthouse for closing arguments, that our case isn’t so good.

As I see it, three main reasons prevent us from being completely transparent with our clients on our strategy and chances of success. First, some clients would just prefer to keep their heads in the sand. As I’ve said, this tendency must be resisted. Second, we don’t feel comfortable trying to explain legal strategy to nonlawyers. Every lawyer has experienced this discomfort in his or her career; some experience it daily. Trial lawyers need to get over it, though. If we can’t confront the difficulties of explaining how we intend to apply the law to the evidence to a business owner, how can we reasonably expect to succeed in teaching these principles to jurors, who are only vaguely interested and often less sophisticated, when it comes time for closing argument? The third reason why we shy away from being transparent with clients about strategy is that we haven’t developed a strategy yet. Let me gently suggest that this could be a problem.

I want to suggest that transparency is not a lofty, or overly ambitious goal. It is as important for lawyers as it is for clients. Not only does transparency reduce the frequency of unpaid legal bills, it instills confidence. Long-term clients generally prefer to play the role of partner, rather than purely customer, and transparency fosters feelings of inclusion in the decision process. Finally, for those of us looking for another way to stand out among our peers, appreciating how our clients appreciate transparency is an excellent opportunity.

[This article originally appeared in the Los Angeles Daily Journal]

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Five Ways You Can Help Your Appellate Lawyer Help You

Hopefully I won’t ruffle too many feathers with the following pronouncement: appellate law practice is a distinctly different animal from trial or lower court practice and it requires specialized training or experience to do it well.

I know that many litigators advertise to their clients and the world that they can ably handle a writ or appeal. Some can. If you’ve handled appeals in your career, whether through budgetary or logistical necessity, and you’ve had success, perhaps you’ll prove me wrong. But, assuming your client is willing, assuming she can afford it, and assuming you can work effectively, efficiently and cooperatively with an appellate specialist, I want to suggest that your client’s odds of prevailing on appeal will be vastly improved by at least involving an appellate specialist whenever possible.

The remainder of this post proceeds from the premise that it is fiscally and logistically possible to involve an appellate lawyer. A lingering problem arises from the impossibility of knowing, at the outset of a dispute, whether it will result in an appeal and a specialist will ultimately get involved. Certainly some cases are unlikely ever to lead to an appeal; I’m thinking here of disputes which are destined by contract to be decided through binding arbitration. Other cases, by virtue of their issues or parties, are virtually guaranteed to see an appeal–or many; here I’m thinking of a case like Apple v. Samsung. There’s just too much at stake for either party to go gentle into that good night without first exhausting every avenue of appellate review.

I call this a “lingering problem,” but it’s really more of a dilemma. Specifically, what can a litigator do, when it’s unclear if an appellate court will ever be asked to disturb a trial court’s ruling, to improve her client’s chances of success if an appellate issue does later arise?

In answering this dilemma, I solicited input from a true expert. Ben Shatz is a partner at the Manatt firm in Los Angeles, a certified appellate specialist from the state of California, a fellow blogger, a prolific writer and, most importantly, a good guy. What follows is our list of five ways that lower court litigators can make it more likely, if their case ultimately requires appellate review, that their clients will gain the most from hiring an appellate specialist.

1. Involve an appellate lawyer sooner than later. You probably saw this coming, but it’s worth stating. If it is economically feasible, Ben suggests an appellate specialist should become involved early “to help review theories, address key motions, spot potential writ issues, pre-cog anticipated appellate issues, review jury instructions and verdict forms (which are fertile areas for appellate review), and help with post-trial motions (which often preview appellate issues).”

2. Preserve that record. Again, obvious. But in the heat of the battle, my focus as a trial lawyer is almost always on convincing the single robed judge before me, not a panel of appellate justices. Ben suggests that “appellate kibitzing can help make sure points are properly raised and not waived.” So don’t forget to kibitz. And try not to let an impatient trial court judge prevent you from saying all you need to say to make a good record; this sometimes takes fancy footwork, particularly if the judge senses you’re just making a record to use later in seeking to overturn his ruling. (See my earlier post on judges playing games with the record.)

3. Don’t waive notice. Ben reminds us that, “too often, after losing a motion (or anything), trial counsel will meekly waive notice. But formal written notice is very useful in figuring out what happened and when, later down the road. Also, written notice often is the trigger for writ review, so it’s good to have a clear starting date for calendaring.”

4. When in doubt go ahead and order a transcript. This is actually two separate points. First, if you’re in a state like California with a struggling judicial budget, be sure to make sure there’s going to be a court reporter taking down the proceedings at any hearing in which there is even the slightest chance a writ or other review may be sought. This requires both ordering and paying for a court reporter.

The second point comes from Ben: “if you just lost a motion and are thinking about a writ, order a transcript right then; take steps to get a written order; don’t waive notice; ask immediately for a stay (or extension to file a writ, if allowed by the relevant statute).” As you’re probably starting to understand, this fourth point requires you to think about the possibility of appellate review before you actually appear for the hearing. Remembering on the morning of the hearing that you needed to order a reporter will be probably be too late.

5. Maintain clean, organized files. Finally Ben reminds us that “It’s not useful if I’m given papers that are annotated by hand (and thus can’t be used in an appendix).” Remember, too, that your client is hiring an appellate specialist for his or her highly specialized knowledge and skills. These do not include conducting “discovery” through your file to find key documents or exhibits.

So keep these suggestions in mind, even when it’s not yet clear there’s going to be an appeal. And, if there is an appeal, think about calling Ben or another appellate specialist, to assist you in getting it done right.

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Be A Superlative Local Counsel

I previously wrote about the circumstances in which it makes sense strategically, financially or otherwise to involve local counsel. Here I want to draw on my experiences as an attorney who has frequently both hired and been hired as local counsel to offer some suggestions on ways you can be an outstanding local counsel.

One observation at the outset. Some lawyers or firms view the role of being local counsel to another “lead” lawyer or firm as less than desirable. They see it as somehow akin to being a second class citizen in the context of a lawsuit (or, I suppose, deal). While lawyers who have this attitude will usually swallow their pride and do the work, assuming they perceive the engagement as fiscally attractive, they never really put their hearts into it. I’ve had good fortune over the years with the firms I’ve hired as local counsel. And I hope my client firms have felt I brought value to our cases.

But I have sensed this kind of friction on occasion, particularly where my partners and I, as lead counsel, insist we do tasks that local counsel believe (perhaps accurately) that they would perform better and cheaper. This decision is usually based either on our financial arrangement with the client (a flat fee, for example) or because we perceive the client expects that we, as lead counsel, will do the work. There’s not much to say to local counsel in these circumstances beyond, I suppose, get over it.

With that piece of throat-clearing out of the way, here are some thoughts about what local counsel can do to set themselves apart and, in doing so, make future engagements more likely.

1. Put yourself in lead counsel’s shoes. Acting as local counsel is unique and calls for a kind of flexible, outside-the-box kind of thinking. Rather than “how would I handle this (situation, development, procedural requirement, etc.)?” the relevant question becomes “what does the client (i.e., lead) firm need to know in order to make an informed decision what to do under the circumstances.” This can be challenging because it may require a lawyer to suppress or ignore her own instincts about what to do, which sometimes conflicts with what the client/lead firm ultimately decides to do.

2. Don’t take much (or anything) for granted. Experience litigating in multiple venues may give us an idea how things are “generally done.” But some jurisdictions do things radically different. For example, the state courts in my home, California, have a very specific procedural scheme, particularly with respect to expert discovery. Out-of-state practitioners struggle to follow our rules of civil procedure because they are unique. Other states adopt procedures that seem to mirror the Federal Rules. The key for local counsel is not to assume your lead counsel knows what is required, even if your state court procedure is mostly on par with the Federal Rules.

3. What do you know about the judge? This is probably obvious, but one of the reasons to hire local counsel is for information and to have local connections. The best local counsel are active in their local bar association and/or Inns of Court. Excluding improper ex parte communications or other unethical influence, it is really helpful when the judge recognizes and respects our local counsel. Educating lead counsel about the judge is another area that is really helpful. You are our eyes and ears on the ground in the local venue.

4. What do you know about opposing counsel? Ditto from above. Even if not friendly or social, do you have–or can you develop–the kind of rapport with opposing counsel that will easily facilitate extension requests or other courtesies? Does opposing counsel have a pattern? Are they lazy until the last 90 days before trial? Do they always fight hard and then settle? Are they competent in front of a jury? Do they know the judge well? Even if you don’t know the answers to these questions, you should have the resources (i.e., connections within the local bar) to ferret them out.

5. What makes your venue potentially unique? This goes back to not assuming anything. The procedural routines you’ve dealt with your entire career may be completely unique and unfamiliar to your lead counsel. Think of this on both micro and macro levels.

6. Exponentially increase lead time. I’ll confess this has been a personal challenge, but you absolutely must think far in advance and let your lead counsel know about upcoming events and deadlines.

A perfect example is California’s summary judgment procedure. I cannot speak to how summary judgment motions are scheduled in other jurisdictions, but the California Code of Civil Procedure requires dispositive motions be heard 30 days before trial. The Code also requires 75 days notice (assuming personal service) of the motion (with additional notice if served by mail, overnight, etc.). While this seems easy to calculate, the rub comes with the clogged dockets of our virtually bankrupt state court system, which can make it all but impossible to ultimately schedule a hearing date within the necessary window if a party does not begin the scheduling process very early. There is authority which suggests the court’s docket, etc. cannot deny a party the right to bring a dispositive motion, but the practical impact of delay will include expensive additional, sometimes nail-biting  procedures, like ex parte applications to have motions specially set the hearing and/or to reduce notice.

7. Communicate, communicate, communicate with lead counsel. And then make sure you communicate some more. Seriously.

8. Don’t friggin’ poach the client. The idea behind taking this work is not as an angle toward poaching the client away from lead counsel. If you see it otherwise, you’re not doing anyone, including yourself, any favors.

9. Do what you can to make lead counsel shine in the eyes of the client. When you’re hired by a general counsel, legal staff member or claims adjuster, it should be an important goal to make that person look good in the eyes of those to whom they answer, whether it is a board of directors, a more senior legal staff member or a claims superintendent. When you get a local counsel gig, make it a goal to make your lead counsel shine in the eyes of their client.

Because I am at the stage in my career where I am aggressively building my own practice, I take opportunities to act as local counsel for what they are–great opportunities to work for new clients and with different lawyers. There’s no reason you shouldn’t do the same.

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Five Ways To Effectively Use A Jury Consultant

Many litigators, even those who do trial work, have only a hazy idea about how much value a good jury consultant can bring to trial preparation and presentation. I’m here, with my friend, colleague and Juryology blogger Rich Matthews, to change that. In this post I’m going to identify five ways a good jury consultant can improve your chance of winning at trial.

First, though, I want to acknowledge a challenging hurdle in getting a jury consultant involved in any case. Often, our clients hold the view that lawyers have the education, training and experience needed to do quality jury research, in addition to our day job of mastering and presenting the legal issues, so hiring a jury consultant is needlessly duplicative. Rich dispels this view right away. He says:

“Clients make the mistake of thinking lawyers should be experts in jury research, and it’s often true that the lawyer who would like to hire a trial consultant doesn’t know what to say to the client about that. I would say that it’s like hiring any other expert for the case– lawyers are skilled at the law, jury consultants are skilled at social research. They are two different disciplines entirely.”

How can you effectively use a jury consultant on your case? Here are five ways:

1. In The Courtroom During Voir Dire.

I’ve either heard it said, or said it myself, either way it’s true: selecting a jury is the least understood process of a trial. This is because most schools don’t teach it and the only way to learn is by doing it and not only are trials precious commodities these days, but judges frequently take over the function of voir dire. As a consequence, many of us are ill-prepared to do voir dire well.

Jury consultants can help in formulating the right types of questions to sound out potential reasons why your client could benefit from challenging particular jurors. “Lawyers,” Rich says, “tend to have the wrong priorities in voir dire. They prioritize arguing their case over the most important thing in voir dire which is to get jurors talking and responding to each other.”

Even if the process is spread over multiple days, such as selecting a jury for a long cause trial, everything moves pretty fast in voir dire. A good jury consultant can help slow the process, or at least help your trial team sort through the mass of data being generated in this tight time-frame, so that intelligent decisions can be made about the need for specific juror challenges.  As Rich points out, jury consultants are skilled at “tracking all the hundreds of bits of data flying in the courtroom all the time and coalescing that into judgment.”

2. In Developing A Jury Profile Before Trial.

Before anyone enters the courtroom, a jury consultant can help the trial team develop a plan for what kinds of jurors (1) they are likely to encounter in a given venue, and (2) of these, which may come into the case with particular biases that will impede their ability to receive and process evidence fairly (by “fairly” here I naturally mean in a way that is favorable to my client). As Rich says:

“While attorneys are keeping up with developments in the law and managing your cases, the best trial consultants are monitoring all kinds of public opinion data and trends. So trial consultants start out in a much better position to develop a profile for the jury for counsel to follow during jury selection.”

Thus, even if your client is resistant to the cost of having a jury consultant present in the courtroom during voir dire or other crucial parts of the trial, there may still be value in the lesser investment of involving a consultant before trial starts.

3. Working With Focus Groups.

You know those parts of the case which you’re most worried about? When the trier of fact is a panel of jurors, those parts of the case are often not legal issues, but “juror issues.” Rich notes that “easily the best way to assess your case’s juror issues, as distinct from the legal issues,” is to work with a jury consultant and one or more focus groups. “Lawyers,” Rich says, “think like lawyers and focus very closely on the precise laws, whereas jurors are more ‘gestalt’ kind of thinkers and are more interested in a broad kind of justice and morality. This difference in focus will lead lawyers to overestimate the impact of a statute/rule/jury instruction on laypeople. The only way to get on the same plane as laypeople is with a focus group.” Anyone who has done focus group research knows it’s going to yield the most valuable information–useful conclusions–if the research is directed and interpreted by someone with the proper training.

4. Case Evaluation.

Most of us, myself included, tend not to think about involving a jury consultant until after the decision to take a case to trial has been made. Rich feels this is a mistake, since we tend to develop a kind of tunnel vision about the quality of our case or defense, and pass that on to influence our clients. Instead, “it’s imperative  to consider the ‘social zeitgeist,’ or what is happening in the collective social consciousness — as well as understand the predictable places where laypeople will deviate from how lawyers think —  when valuing a case or deciding whether to take it to trial.” Good jury consultants should be able to channel into this and inform your case evaluation.

A bonus to involving the consultant earlier than later is that he or she can help you shape your discovery to fit a theme that is likely to resonate with jurors, as opposed to the more common approach of trying to pigeonhole evidence gathered at random into a theme that is developed for the first time on the eve of trial.

5. Witness Preparation.

A consultant can help prepare a witness for testimony in deposition or a trial in a way that most lawyers cannot. I’m afraid I have to agree with Rich when he says:

“Lawyers have proven woefully inadequate at witness preparation. Most lawyers think that reviewing the facts and saying ‘Just remember to tell the truth’ constitutes good witness preparation. It doesn’t. Imagine a witness who actually has skills at testifying– not just what to say, but how to say it; how not to bait the bear; how to tell his or her story to jurors. It’s so much more than just ‘Here, re-read your deposition transcript and make sure you follow it precisely or else we’re going to be in trouble.’”

Ok, I’m not that bad at witness preparation, since it’s something I’ve long recognized to be crucially important. But yes, Rich, we get the message!

One last word on hiring a jury consultant, devote the time and effort to finding a good one. As Rich says, there are “lots of mediocre consultants flooding the marketplace.”

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Should You Do A Post-Trial “Postmortem”?

Living through trial. The only thing most of us think about is winning. (Unless, like me, you get that 11 pm craving for carne asada burritos con guacamole, then you think about that, too.) After the verdict, win or lose, the last thing everybody wants is to go back through it and take stock of what happened, what went well or went poor and how we can do better next time.

But there is real wisdom, once the dust truly settles, in going back over everything to ponder, “What did we learn from this?” For institutional clients of every size, trials are a huge investment of time, money and resources. It makes a lot of sense for them, ideally in conjunction with their counsel, to do a trial postmortem. This not only helps prevent future “situations” requiring litigation but, if cases do arise in the future, it enhances the chances of success. Astute lawyers recognize the value and opportunities of this process and collaborate with their clients to do a comprehensive postmortem, possibly for free! Even if the client shows no interest, much can still be gained if only the members of the trial team come together for a postmortem session.

A generous article on this topic, “Trial ‘After Action Reviews,'” appeared in the August, 2013 issue of For the Defense. The authors, Milwaukee lawyers Ric Gass and Michael B. Brennan, point out that “Army generals as far back as Caesar in his ‘Commentaries on the Gallic War’ have learned strategic and tactical lessons through after action reports.” (Id. at 29) The article is sweeping in its scope. Among the valuable points made by the authors was the following:

“Crucial to the success of an after action review is, to use the military jargon, ‘leaving your rank at the door.’ If you are the lead counsel, you need to be willing to listen and to learn from the observations of others on your team. You were probably too busy while doing that crucial cross-examination to take in everything else in the courtroom, such as reactions of jurors, or of the judge or opposing counsel. But your co-counsel, your paralegal, or your jury consultant did watch for those reactions, and you need to hear what they saw.” (Id.)

The authors suggest some topics for review during the postmortem, including:

  • Jury Research: “Did the jury research accurately predict the attitudes and reactions of the jurors and the ultimate result on liability and damages?” (Id.)
  • Opening: “What worked well for us? What worked well for opposing counsel?” (Id.)
  • Direct Examinations: “Did a certain witness’s testimony connect with the jury, and if so, why?” (Id.)
  • Cross-Examinations: “Was the tone of the questions too harsh or too lenient? . . . How many of the admissions made on cross-examination made it into the closing argument?” (Id. at 30.)
  • Expert Witnesses: “Would we use this expert again, and more importantly, why?” (Id.)
  • Closings: “What worked well for each party, and why?” (Id.)

Finally, the authors point out that:

“Being a trial lawyer is a lifelong learning experience. . . . If you have had any kind of trial, but especially a major trial, you need to appreciate it for all the experience it brings and to wring every last piece of learning that you can from the experience. . . . [Y]ou need to figure out how to carry that understanding and the techniques that went right to your next trial.” (Id.)

I know first-hand how much clients appreciate it if, after the trial, you offer to travel to their offices and help your in-house counterpart prepare and present a postmortem, with the specific goal of avoiding similar situations in the future. They really, really appreciate it when you don’t charge them for the experience. If your trial counsel won’t do this for you, ask them why not. Then remember to call me.

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Five Ways To Improve Your Client’s Experience At Arbitration

I last wrote, rather flippantly I thought, about why, when given the choice, I generally shun arbitration in favor of mediation. One of the comments I received, from über-neutral Deborah Rothman, suggested that I owed it to my readers to check out the set of Protocols developed by the College of Commercial Arbitrators to address the kinds of issues I raised in my post. Well, I did. And it turns out this user-friendly, publicly available monograph, Protocols For Expeditious, Cost-Effective Commercial Arbitration, has a fair amount to offer on the subject of . . . well . . . making commercial arbitration more expeditious and cost-effective. Thank you, Deborah.†

By way of introduction to the Protocols, I thought it made sense to highlight just a few of the suggestions contained in the Protocols aimed specifically at outside counsel. (There are also separate Protocols for business users and arbitrators.) Here you go:

1.  Know What You’re Doing.

I spent so much of my post bashing arbitrators, that I managed to overlook a very important point: it helps if the lawyer advocates have a clue what they’re doing. We generally assume this means having a grasp of the body of law governing the subject of the dispute. While that’s surely crucial, the Protocols point out that it is equally important that counsel understand the unique rules of arbitration advocacy. As the authors comment:

“Counsel who agree to represent parties in commercial arbitrations need to have a solid understanding of the arbitration rules that will apply, the practices of the provider that is administering the arbitration, and the growing body of state and federal arbitration law. They should know how to navigate the arbitration process in an economical yet effective way.” (Id. at 61.)

2. Select Arbitrators With Proven Management Ability.

I would argue that careful selection of the neutral is the single most important step when engaging in any form of alternative dispute resolution (ADR). This Protocol recommends going even farther. It suggests:

“Counsel should do a thorough ‘due diligence’ of all potential arbitrators under consideration and should, consistent with the Code of Ethics for Arbitrators in Commercial Disputes, interview them concerning their experience, case management practices, availability and amenability to compensation arrangements that would incentivize them to conduct the arbitration efficiently and expeditiously.” (Id. at 62.)

3. Seek to Limit Discovery In A Manner Consistent With Client Goals.

I have mixed feelings about this Protocol. One of the problems I’ve historically had with arbitration involves limitations on scope of discovery. It’s fine for the parties to have a goal at the outset to limit discovery to only what is necessary. But it can become a problem if the parties (or one of them) are too optimistic, leading to an overly restrictive scope of discovery. This is what the drafters of the Protocols have to say:

“Discovery is far and away the greatest driver of cost and delay in litigation and in arbitration. . . Outside  counsel have an obligation to make sure the client understands the limitations inherent in arbitration discovery, to assess how much (if any) discovery is truly needed in the case, and to ascertain how much time and money the client is willing to expend in turning over stones.” (Id. at 64.)

See, it’s this “how much (if any) discovery” nonsense that troubles me. In my experience, a client’s case rarely gets worse by conducting discovery, and generally it gets an awful lot better with sufficient discovery. I do recognize that, at some point–generally earlier than later–discovery begins to yield diminishing returns. But the only time I’ve had a bad outcome at an arbitration was when I inherited a case on the eve of the arbitration hearing from a rather dim-witted colleague and the only discovery permitted and conducted was a set of document demands. It was the very worst experience. I say this: if don’t want to conduct discovery then forget arbitration and forget hiring a lawyer and bring your dispute in small claims court. Seriously.

4.  Periodically Discuss Settlement Opportunities With Your Client.

Being an effective, client-centric litigator, whether in trial court or arbitration, requires us to think simultaneously in two different directions. It can be challenging. Even as our client’s case improves, we need to continue questioning whether their interests would truly be better served by negotiating a settlement. This is one of the reasons I think we should strive to adopt the Mr. Spock way of purely rational, objective thinking.

The Protocols authors say this:

“[P]ropitious opportunities for settlement often appear at multiple points during arbitration, including during discussions with opposing counsel in preparation for the preliminary conference, after briefing or rulings on significant threshold matters, on completion of all or particular discovery, after submission of dispositive motions, during the hearing, and after submissions of post-hearing briefs. At all of these stages, outside counsel should re-evaluate their initial case assessment and discuss with the client the pros and cons of pursuing settlement.” (Id. at 65.)

5. Recognize and Exploit The Differences Between Arbitration And Litigation.

Pretty much consistent with my post, the Protocols dispel any lingering hope we may have for success at summary judgment or rigid adherence to the rules of evidence. The drafters say:

“Counsel should . . . keep in mind that dispositive motions are rarely granted in arbitration, and should employ such motions only where there will be a clear net benefit in terms of time and cost savings. Counsel should be aware that arbitrators tend to employ more relaxed evidentiary standards, and should therefore avoid littering the record with repeated objections to form and hearsay.” (Id.)

Yes, your otherwise valid evidentiary objections in an arbitration hearing may not be worth the cost of your breath. They are, both literally and metaphorically, “litter,” or useless trash. They could actually irritate the arbitrator (not to mention your opponent). While the Protocols topically suggest we should “exploit” these differences between arbitration and litigation, neither the Protocol nor the accompanying comment offer much advice about how to turn the lack of available dispositive motions or rules of evidence to our advantage. I’m unconvinced.

While it’s unlikely to provide any immediate relief, one of the Protocols urges lawyers to “work with providers to improve arbitration processes.” (Id. at 67.) I suspect (but have not yet confirmed) that there may be a corresponding Protocol aimed at arbitrators which suggests they give serious consideration to advocates’ comments and suggestions. At least for now, I will continue to prefer mediation to arbitration as an effective form of ADR. However, the Protocols seem to invite a dialogue, which would seem like a step in the right direction

†Ms. Rothman, along with Curtis von Kann, are Associate Editors of the Protocols. Thomas Stipanowich is the Editor-in-Chief.

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I Don’t Always Do ADR . . .

But when I do, I vastly prefer mediation to arbitration. Here are five reasons why:

1. The Split-The-Baby Problem.

I’ve had retired judges and other neutrals tell me they don’t like presiding over arbitrations because they invariably lose a future potential client: the lawyer for the losing side. There is one thing arbitrators will try to do to temper this inevitability: they may issue a “split the baby” award, giving an allegedly aggrieved plaintiff something even if he failed to prove his case or suffered no damages. While many will argue that a small “split the baby” award is far better than a runaway jury verdict, in cases involving fee-shifting statutes, such as employment discrimination litigation, the employer who might have won outright in front of a jury is forced to pay the “prevailing” plaintiff’s attorney’s fees (in addition to the arbitrator’s fees and costs).

2. Informality Is Not Necessarily A Good Thing.

It is often thought that arbitration is preferable to a bench or jury trial because the proceedings tend to be more informal. Informality might sound good, but it can be a problem if your arbitrator decides to relax the rules of evidence (which is typically within her discretion) and your opponent’s case hinges on an item of otherwise inadmissible evidence, such as a hearsay statement.

3. No Appellate Review.

What do you do if you lose the arbitration due to a clearly erroneous ruling by the arbitrator? Don’t look to any appellate court for relief. While it is true that the Federal Arbitration Act (FAA) and other schemes may create a situation in which some appellate review is available, the circumstances and scope of review is inevitably limited compared with a state or federal appellate court.

4. Good Luck With That Summary Judgment Motion.

While it can be argued that certain courts are more or less likely to grant meritorious summary judgment motions, many will agree that obtaining summary judgment in a case pending before a private arbitrator may be the toughest sell of all. Without naming names, I suspect there are two reasons for this. First, an arbitrator who grants summary judgment is foregoing a significant income opportunity. While many first-rate neutrals are so fully booked they have no trouble filling time gaps created by a vacated arbitration hearing, this is not always the case. Second, a party who is deprived its right to a full evidentiary hearing because of a summary judgment will almost certainly feel shorted. Her lawyer is unlikely to hire the neutral again.

5. It’s Damn Costly.

Many practitioners feel as I do that arbitration is just too costly to be seriously considered as an alternative to resolving a dispute in state or federal court. In addition to the arbitrator’s hourly rate, which equals or exceeds that of most lawyers, many ADR providers tack on large administrative charges. Those of us that represent employers in employment litigation are stuck trying to explain to our clients why they must deposit, in advance, all of the arbitrator’s fees and costs.

I recognize these are pretty broad strokes. But in most instances, given the choice between a bench or jury trial and a binding arbitration, I’d prefer to stay in court and try to resolve the case through mediation.

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Your Expert’s First Role In Any Case

Litigating any case is stressful business. But I had a real nail-biter some time back. It was a product liability case and my client was a small mom-and-pop outfit that supplied a component which had been materially altered, mis-installed, and ultimately caused a rather horrendous accident.

Legally, it should not have been a difficult case to defend. The problem I found myself having was grasping exactly how the alteration and mis-installation had ultimately impacted my client’s component. Any product liability lawyer will tell you this was crucial to the defense. The technical issues were pretty complex, at least for me (a philosophy major, not an electrical engineer), and no matter how hard I tried to understand, no matter how much I thought I’d finally “got it,” I would struggle anytime I tried to explain how the alteration and mis-installation had fouled up my client’s product.

In any other case, I would have relied on our technical liability experts to teach me all of the technical details I need to know. The problem here was that my client was defending the case on a shoestring budget. If we weren’t careful, this case would bankrupt his company. He insisted that he would serve as the primary expert, since he was an engineer who’d invented the component in the first place and nobody knew the technology better. The obvious issue with this was he has no cloak of independence. His testimony would be viewed by the jury as completely self-serving; his opinions suspect as such. The less obvious issue that I had with this plan was the fact that, while my client was undoubtedly a first-rate engineer, his teaching skills were less than stellar. If he couldn’t teach me, how could I expect him to educate the jury? Meanwhile, my opponent was retaining expensive, experienced testifying experts from Exponent, etc.

I typically wouldn’t hire anyone as an expert who couldn’t help me understand, since (1) my comprehension of the technical details is absolutely crucial to my ability to confront the plaintiff and her experts, both in discovery and at trial; and (2) our expert’s ability to educate someone of less-than-genius-level intelligence (i.e., me) is going to be needed in order to help the jury understand why my client can’t be liable. The importance of an expert’s ability to educate the trial lawyer, as well as the lawyer’s responsibility to conduct his/her own outside learning, is discussed by Professor McElhaney, in Litigation. He says:

“The first job for the [expert] witness is to explain everything to you [the trial lawyer]. You have to keep asking questions and demanding answers until you are satisfied. Do not just rely on the witness, either. Read as much additional literature as you have time for; it is not just background information. Learned treatises that support the witness are admissible under Rule 803(18) of the Federal Rules of Evidence.” (p.62)

Our case ultimately settled, and I breathed a deep sigh of relief, but not before spending several near-sleepless nights worrying how I was going to overcome the challenges of sufficiently understanding the technology to deal with both the plaintiff’s and defense liability experts. It was a learning experience in several ways. I learned to quickly recognize when I’m having difficulty grasping the complex technical concepts necessary to effectively defend (or build) a case. I learned that, regardless of budget constraints, it will not suffice to rely on testifying experts who, though knowledgeable in the subject matter, cannot effectively teach it to a complete novice. I learned that selection of experts is not a discussion to put off having with a client until the time for expert retention, but should be addressed at the outset, to ensure the client has an opportunity to think about how an appropriate, qualified expert can be identified and compensated, even with severe budget constraints.

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Five Sound Negotiation Pointers

I recently participated in a conference about negotiation. I left with a list of negotiation “pointers,” short strategies to help keep your eyes on the prize when negotiating. I’ll share five good ones here.

1. Set your goals ahead of time and come prepared with alternatives. You (should) know you will be making concessions in the negotiation process; try to think of what concessions are acceptable and where you’ll need to draw the line. In this planning, also anticipate your opponent’s points and develop responses.

2. Make sure the other side feels heard and understood. Then make sure they hear and understand you. If either party to a negotiation is not being heard, it’s not really a negotiation.

3. Don’t be dragged into an emotional response. Condescension, rudeness or bullying should be firmly met. Don’t back down–remind them that you came prepared to make a deal and that you thought they did too, then transition back to the points you want to discuss. Once your opponent realizes their tactics are not intimidating you, they will likely stop.

4. “Horse trade” when making concessions. Try to make concessions conditional on an equal or greater concession by them. Also, before making a concession, try to find out what additional concessions they will ask for before signing an agreement.

5. Don’t be afraid to invoke a “cooling off period.” If you reach an impasse, or are not sure what move to make next, consider asking your opponent to give you 24 hours to consider their last move. A corollary is not to be so eager to make a deal that you make concessions you will later regret.

And, remember, we’re all counting on you.

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Sound Strategies For Litigating In A Crumbling Court System

This originally appeared in the Los Angeles Daily Journal.

At the risk of ridiculous understatement, all is not well in the California state court system. Last week it was reported that, over the last five years, about $1.2 billion has been taken away from our state judiciary, leading to the closure of 164 courtrooms and roughly 2,000 layoffs. In Los Angeles courts, the situation is just going to get worse. Another round of cuts are slated for June, meaning 25 percent fewer courtrooms, and the 16,000 pending personal injury cases will be divided among just three judges.

For those of us who cannot just “pack it in,” but must continue to ply our trade in this challenging environment, the question becomes how to effectively cope with these developments. The most natural response would be to choose a different forum. But federal district court is only an option when it is an option. And, while binding arbitration gives clients the chance to have their disputes heard where, when and by whom they chose, I argue this is rarely a reasonable alternative for at least two reasons. First, arbitration costs an arm and a leg, and these costs are frequently borne at the outset by just one party — usually the defendant. Second, putting one’s fate in the hands of a single decision-maker, with no possibility for review, is a bold step not to be taken lightly.

So, assuming federal court and arbitration are not viable alternatives, what can litigators do? Here are some suggestions:

Take control. The days of state court judges with the time or inclination to micromanage a case are behind us. This creates both a burden and an opportunity. If it furthers your client’s interests to take the helm and control the course of the litigation (and it usually does) and you package your plan in a way that is easy for the judge to adopt, it is possible to gain a tactical advantage.

Consider the Case Management Conference, which is often the first chance to meet the judge. Increasingly, it may be your only time with the judge before trial. Make the most of it. I’m not suggesting judges will begin to show interest in those vanilla Case Management Statement forms. But that doesn’t mean you can’t come to the conference prepared to get something done. Have an agenda and be specific. Want staggered expert disclosure deadlines? Raise it at the conference. Already having problems getting the other side to agree to deposition dates? Ask the judge to schedule them, making the dates part of the minute order. Many judges will appreciate having at least one attorney in the case who is awake at the wheel and ready to advance the ball. You will both curry favor with your judge and advance your client’s interests.

Look for early exit opportunities. This isn’t new or revolutionary. But fewer available courtrooms means it will take longer for your client’s case to reach trial. There was a period when judges aimed to push cases through within a year. This just isn’t going to be viable going forward. If an early exit by summary judgment or settlement is a possibility, pursue it earlier and save your clients the inevitable costs of languishing. Perhaps formulate a reasonable estimate of how early a summary judgment motion could be heard and reserve the hearing date right away. If you don’t, you may learn (as I did) that the court can’t hear your motion until about a week before your trial date (if then), which pretty much defeats the purpose of seeking summary judgment.

Be proactive in simplifying the case. Historically, it was not uncommon for a plaintiff to pursue every theory and keep every party initially sued in the case until the bitter end. This is not an indictment, but an observation. While ancillary theories are ultimately abandoned and unnecessary parties inevitably dismissed, the truth is they probably didn’t belong in the case to begin with and should have been omitted or “cut loose” much sooner. Simplifying the case sooner is not only the right thing to do; it will help reduce the judicial logjam.

Learn to meet and confer. We know the rules of civil procedure require us to demonstrate a good faith effort to meet and confer with opponents before filing discovery motions. Regardless whether we took that obligation seriously in the past, there is no question we must be sincere in our efforts to informally resolve discovery disputes now, since we’re unlikely to get rapid, if any, relief through judicial intervention. Meeting and conferring means earnestly trying to solve a problem, not just posturing.

Manage client expectations. Clients may have wildly different expectations about how a case will progress toward trial. To the extent these expectations may be unreasonable, based on another venue or a different era, take steps to ensure they are in line with the current environment. It is our court system, and not your practice, that is in crisis. Make sure your clients understand this.

Keep abreast. One major complaint cited in a recent Law360 article was the situation of showing up for a firm trial date only to learn it has been continued for weeks or months. We all know how disruptive trial preparation can be, not only for businesses, but also for individual clients. Contacting the clerk as a trial date approaches can often (though not always) yield information that helps reduce the surprise and attendant costs when the trial has been continued.

Is a court action really necessary? Pre-suit settlement has always been an option, but not always one taken seriously by lawyers or their clients. The current judicial budget crisis should change that. Not only will it take longer to get a case to trial, but the costs of getting there — from rising routine filing fees to optional, party-funded court reporters — are rapidly increasing. Where parties might have historically elected to proceed straight to litigation solely to enhance bargaining power or demonstrate resolve, it makes much more sense in the current environment for every party to thoroughly explore settlement before filing a complaint or refusing to further negotiate.

It is not inconceivable that more state general fund money will be allocated to the judiciary to alleviate the courtroom closures and staff layoffs. Until then, however, it falls on practitioners to do what we can to protect our clients during this challenging time. Hopefully these suggestions will help.

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Lesson From Big Dog Defendants: Insist On An Evaluation

I counsel and defend both small and large companies, mostly on employment issues and cases. I see many differences in how a larger, more established company handles its role as a defendant in civil litigation, and I think there are important lessons a smaller entity can learn from these “big dogs,” even if they never plan (hope!) to get sued again. Chief among these lessons is the value of a well-considered evaluation report.

Smaller companies might view any kind of written evaluation as a frivolous, unnecessary expense. I sympathize with this view, but I think it is misplaced. First, as you’ll see, I’m not advocating the kind of “term paper” report demanded by large corporate defendants. For a corporate client or insurance carrier that is regularly involved in litigation and knows what it wants to know, I’m happy to provide the most detailed report in the world. Why would I object–I get paid to do it?

But when I counsel a company that rarely finds itself in civil litigation, I don’t think it’s necessary to incur the cost of a 20 or 30 page tome. Rather, something that is between 2 and 4  pages total balances cost-efficiency with the importance of a written evaluation.

Before I get to what to look for in an evaluation, I want to cover timing. Large corporate clients for whom I’ve prepared evaluation reports typically require a comprehensive initial report anywhere from 90-180 days after the suit was assigned. Thereafter, most corporate clients like to see an update every 90-120 days, with some kind of even more comprehensive pre-trial evaluation about 60-90 days before the scheduled trial date. There’s no reason a smaller company should deviate from this timing. It is important to understand that an update is just that, it’s not a re-writing. I simply bold any information that is new since the last report. If there are things from prior reports that no longer belong, they can either be scored or deleted altogether.

Here are the elements I would, as a client, always expect from an evaluation of a case in litigation:

1. Brief statement of operative facts. Brief means brief. The point is to make sure both the client and the lawyer have a common understanding of the operative facts. These might be both what is alleged and what the defendant is expected to prove. The last thing any client should want is for its lawyer to start trial without ever having run through a narrative of the operative facts on paper.

Also, even a very small company will likely have people involved at the management level with only a marginal understanding of the facts. This brief (did I say brief ?) statement can be shared with senior management, directors, investors or partners, to bring everyone up to speed. In addition to the liability facts, I would also include a list of the theories of liability and a brief statement of the damages sought, even if only in summary prayer, rather than concrete dollars and cents.

2. Very brief evaluation of the venue, judge, opposing counsel and plaintiff. (I mean brief dammit!)

3. Evaluation of each viable defense, including strengths and weaknesses. This is really the heart of the evaluation. This should be written in language that, to the extent possible, is devoid of legalese or confusing concepts. Clients who are not lawyers should be able to read this section and get a clear understanding of what will be proven at trial and how. On receiving this, clients should ask counsel to clarify any point that is not clear.

Now, while this section of the evaluation is written for the client, part of the value is in the composition process itself. In formulating this part, the lawyer will be forced to think through the client’s defenses, evaluate their viability and even develop a short inventory of what evidence will support the defense or make it challenging.

4. Exposure. How much, realistically, could the client lose if the case is tried and lost. In my field, employment law, this needs to include an estimate of the opposing side’s attorney’s fees since most federal and state employment law schemes permit a prevailing employee to recover her reasonable attorney’s fees.

5. Ultimate recommendation. Is this a case that should settle? Is it a trial candidate: i.e., one in which there is a 75% or greater likelihood the client will win (I prefer to think of it this way: a jury will return a defense verdict 7 out of 10 times)? Clients’ risk tolerances differ; some are more willing to gamble, others want to be virtually certain of prevailing at trial (there’s no such thing as virtual certainty of a verdict, by the way).

If the recommendation is to pursue settlement, what is a reasonable settlement amount, and what is the proposed path to get there?

6. Tasks and budget. Clients should be entitled, at every stage of any lawsuit, to a list of what is anticipated to be done in the next 60-120 days, and a reasonable estimate of what the cost will be. Hopefully clients understand that this is only a thoughtful estimate of what is required and the cost. None of us is omniscient.

Crucially, an evaluation should be considered a living document. Cases evolve. If every single fact, estimate and nuance of an evaluation remains the same from the beginning of the case until the start of trial, something is missing. Again, I advocate an approach that simply adds new developments to an old evaluation in bold.

Many lawyers will provide some kind of evaluation as part of their ordinary practice. If you’ve hired one that does not, ask her not only to provide an evaluation, but to provide it early enough so that a bad case can be settled before so much time and money has been invested that settlement is not a viable option for one side or the other.

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